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Will Cinemas survive the second wave of Covid-19?


Published on Tuesday, 02 March 2021 by Lerato Senne in Marketing

Lerato Senne, Insights Strategist at The MediaShop

Lockdowns and social distancing measures kept cinemas, concert halls, exhibition centres and stadiums around the world closed for much of 2020. Shifting performances and other events online has been the order of the day for all sectors. Advertising and promotional spend, as one of the most pragmatic line items to cut, saw brand owners slash advertising and promotional spend almost to the point of irrationality.

From a spend point of view, cinemas declined drastically by 66% compared to 2019. This was worsened by the hard lockdown implemented by the government in March last year. Cinema reported no ad-spend for a solid five months.

During that period, most campaigns were cancelled as people were working from home and Cinemas were completely halted, resulting in the inevitable retrenchments and restructuring.

The PWC Global Entertainment and Media Outlook 2020-2024 report projected a 65.6% revenue decline in 2020 as the result of the Covid-19 impact and this is exactly what we’re seeing when we look at cinema ad-spend in South Africa.

The pandemic accelerated challenges already present in the industry as cinema chains competed for consumer attention with streaming services like Netflix, Amazon and others. Whilst box-office revenues have been hit, there’s been unprecedented growth in online video usage both transactional and subscription during 2020 according to Omdia.

We started the year with the second wave of Covid-19 and the continuation of lockdown, restrictions, curfews and a declining economy. Cinemas, while able to operate, are now struggling with a lack of adequate new and big-draw releases to pull in potential movie-goers. Most consumers were and are reluctant to visit the cinema with Level 3 lockdown curfew restrictions resulting in even more strain on revenue opportunities. In preparation of this article, we also reached out to some of our cinema media houses for comment:

Like with many businesses, cinema has not been exempt from the impact of the second wave of Covid-19. However, Cinevation | Popcorn Cinema Advertising have ensured that all our advertisers are given audience reach guarantees based on actual 2019 attendance figures , This ensures that the advertiser’s campaign still deliver the desired results while still maintaining the ad revenue for our various cinema operators, says Justin Inglis, Sales Director of Cinevation | Popcorn Cinema Advertising.

: With a slight increase in content in December 2020 SKT, witnessed an 81% increase in attendances compared to November 2020; proving what we all know - content is a key driver of the cinema business. According to the Theatre Release Schedule, Hollywood, to which we are mainly dependent, will release tentpole films later this year. Depending on the state of Covid-19 pandemic, we anticipate that cinema will begin to recover.

Research around advertising in cinemas shows that movies are seeing a resurgence in popularity among young and senior audiences alike – and that cinemas are a positive environment in which people are more emotionally engaged and receptive to advertising.

According to Global Studies including the DCM study in the States and the Empire Survey here in South Africa, most people will return once their safety concerns are addressed and the right content is available. “In fact, since Ster-Kinekor’s partial reopening we have already hosted over 600k movie goers,” says Leslie Adams from Ster-Kinekor.

I asked Leslie what 2021 means and with a very short answer he responded “2021 is a year of recovery”.

Last modified onWednesday, 03 March 2021 08:11